Pension Equality Must Be Resolved

September 07, 1988|The Morning Call

Last month's decision by the president judge of the Commonwealth Court that invalidated the two-tiered pension system for most Pennsylvania judges could have far-reaching consequences for all Pennsylvanians. If the ruling survives an appeal, it could cost taxpayers at least $100 million in additional pension benefits to judges for the next 25 years.

Moreover, if the court ruling is upheld, it is almost a certainty that Pennsylvania legislators will benefit because they, too, are governed by a two-tiered pension system that the court has held to be an "inequity" for the judiciary. If pension equity is to be achieved among our legislators, the taxpayers will have to cough up an estimated $1.3 billion in the next quarter century.

Ironically, it was the Legislature that initiated the two-tiered pension scheme because the initial system was too expensive to fund. Thus, in 1974, the retirement benefit package was reduced for lawmakers and judges who took office after March 31 of that year.

One has only to look at the dollar differential between the pre-1974 pension payout and the post-1974 pension payout to realize that an inequity exists. For example, a judge who came to the bench before March 31, 1974, could retire with an annual pension of $56,000. A judge who took office after that date would receive $32,000 in annual pension. For the lawmakers on either side of the pension demarcation line there are thousands of dollars that divide them.

Whether the two-tiered system is legal ultimately will have to be decided by the courts. There are, however, two larger questions that members of the General Assembly will have to address. First, does the authority to legislate salary and pension benefits for state legislators and judges reside in the General Assembly? And second, can the Legislature adjust salary and pension benefits to respond to fiscal common sense? Such discussion should begin now, and not wait until the court rules on what is the narrow issue of equality.

But there is a third question that really is the most important question. It transcends both the issue of who is in charge of granting pay raises and benefits and the legal ramifications of these issues. The question is. . .how much should a part-time legislator be paid and how much should a part-time legislator receive in pension? Those decisions are now in the hands of the legislators themselves and are interpreted by judges (whose pay and pension are controlled by the legislators). Such a system has obvious built-in trouble spots.

Once again, we call for an independent salary and pension commission to determine how much Pennsylvania legislators and judges should be paid. This commission would replace a system that has invited abuse, lacks objectivity and one which would have bankrupted private enterprise.